Suffolk leaders welcome government’s pledge to retain furlough scheme
PUBLISHED: 07:30 13 May 2020 | UPDATED: 10:39 13 May 2020
The government is to retain its furlough scheme until October – but from August there will be changes to bring staff back to work and for employers to share more of the cost of wages.
News of the extension was widely welcomed, although according to chancellor Rishi Sunak it is costing £8bn a month – a similar cost to running the NHS.
In Suffolk, businesses and political leaders welcomed the news of the extension. Ipswich council is one of few councils across the country to have furloughed staff. It has put 200 mainly part-time staff on furlough for three weeks.
Labour council leader David Ellesmere said it was too early to decide what it would do about its furloughed staff – but it was good news that the government was continuing to support employers in this way.
He said: “We will have to seen what all the details are, but it is good that this support will remain to prevent a major increase in unemployment. I am also pleased to hear that the government is looking to support businesses bringing back staff later in the summer.”
There was also a welcome for the government’s move by Conservative county council leader Matthew Hicks, who said: “The extension to the scheme is further demonstration of continued government support for both the employers and employees, which is to be welcomed in these unprecedented challenging times.”
Mr Sunak told the House of Commons: “Full details will follow by the end of May, but I want to assure people today of one thing that won’t change. Workers will, through the combined efforts of government and employers, continue to receive the same level of overall support as they do now at 80% of their current salary up to £2,500 a month.
“I’m extending the scheme because I won’t give up on the people who rely on it. Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side.
“Until the end of July there will be no changes whatsoever. Then from August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.
“Employers currently using the scheme will be able to bring furloughed employees back part-time. And we will ask employers to start sharing with the government the cost of paying people’s salaries.”
The chancellor’s extension of the furlough scheme is a “huge relief” to many according to the Suffolk Chamber of Commerce.
Chief executive John Dugmore said: “The extension of the Job Retention Scheme is good news, and will be a huge relief for many of our members and the wider business community of all sizes and sectors.
“The Chancellor is once again listening to what the chamber network have been saying and we can count this as another policy win for our members. The changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme. We will engage with the Treasury and HMRC on the detail to ensure that this gives companies the flexibility they need to reopen safely.
“A recent survey by Suffolk Chamber of Commerce shows that 70% of Suffolk businesses have furloughed staff with 93% furloughed for at least three months. The extension of the scheme will allow businesses to keep hold of staff without the necessary redundancies due to the expected economic downturn.
“Over the coming months, the government should continue to listen to business and evolve the scheme in line with what’s happening on the ground. Further support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions.”
James Lay, partner for corporate finance and business advisory at MHA Larking Gowen, said: “It’s fantastic news for businesses and employees. It’s giving everybody some extra breathing space to find our way out of this situation.
“It is very expensive. But the government is generally borrowing at very low interest rates.
“Seven or eight million people are making use of this scheme. Many of those would have been made redundant by now if furlough didn’t exist.
“I think the success of our recovery is going to be dictated by our ability to recover quickly and keeping people employed for as long as possible will give us the best chance to do that.
“Inevitably not every business and every job is going to be there going forward but the furlough scheme is giving us a fighting chance of recovering.”
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